Tuesday, September 25, 2007

Voluntary Simplicity and a Billionaire

Rumored to own only a single pair of shoes, Chuck Feeney was the founder of the highly successful retail chain, the Duty Free stores. Using the fortune he generated in the private sector Chuck Feeney should be a multi-billionaire. His co-founder, Robert Miller, enjoys the trappings of wealth, and lives the life of a billionaire, with the requisite socialite daughters ("The Miller Sisters").

Its really interesting to contrast the lifestyles of these former business partners. Chuck Feeney gave almost all his money away to his charitable foundation, save for a few million he set aside for himself, his wife and kids. The amount he set aside was on the order of $2M to $5M, enough to live comfortably and with financial security, but nowhere near the fortune Feeney amassed in the private sector. Here are some excerpts from a recent review of Conor O'Clery's new book on Feeney:
... Until he was outed 10 years ago, New Jersey-born Chuck Feeney was the world's most profligate secret Samaritan. He remains, at 76, the most unusual. Eschewing all traces of luxe, the man who compiled what would today be worth $4 billion buys his suits off the rack, uses a plastic bag for a briefcase, sports drugstore spectacles, wears a $15 plastic watch, and flies coach. He owns no house and no car. He wonders aloud about the need for more than one pair of shoes. When he's in New York, he likes to dine on chicken pot pies at grubby midtown dives. "It has always been hard for me to rationalize a 32,000-square-foot house or someone driving me around in a six-door Cadillac," the publicity-phobic Feeney told Business Week in a rare interview in 2003. "The seats are the same in a cab. And you may live longer if you walk." As New York Times columnist Jim Dwyer once said, this is a man whose life is like Donald Trump's, only backwards.

... Feeney's early days in business were an exercise in frugality. He held meetings in coffee shops and had an entertainment budget of zero. With his business partner, Robert Miller, he built Duty Free Shoppers into an international behemoth. That part was known throughout the 1970s and '80s. What wasn't known until 1997 was that 15 years before, Feeney had decided to systematically give it all away. He had grown tortured about the state of the world and his having so much. In 1982 he secretly transferred his share of Duty Free to an offshore Bermuda foundation he'd set up named Atlantic Philanthropies. It was one of the biggest and most unusual philanthropic feats in history.

Feeney was obsessed with concealing his identity and even keeping the endowment a secret from Miller, who revels in a life of ostentation and whose socialite daughters went on to marry a prince, a Getty, and a von Furstenberg. Any grant from Atlantic came with hyper-lawyered nondisclosure agreements and vows of secrecy. He agreed to this book only because the story was already leaking out, and he wanted to make sure the details were correct.

... As the father of the "giving while living" school of philanthropy, Feeney has had a great deal of impact in philanthropic circles. This carpe diem approach has influenced other super-philanthropists, including Bill Gates and Michael Dell, to donate their fortunes during their lifetimes as opposed to bequeathing riches posthumously. The philosophy goes against the grain of most American philanthropy, where charities limit annual giving to 5% of their endowments. In 2003, Feeney's Atlantic made a stunning announcement: It planned to spend itself out of business over the next 12 to 15 years, giving away $350 million annually to four causes: disadvantaged children, the care and treatment of the elderly, global health problems, and human rights.

Feeney's spend-it-now philanthropy has also influenced others to better prepare their children for lives of privilege minus the psychological hex wealth can sometimes be. In keeping with his ideas that life should not be an acquisition spree and that work and a sense of purpose ultimately bring a richer existence, Feeney long ago bestowed modest sums on each of his five children. He did the same for himself. The worth of his stake today? $1.5 million. Feeney isn't just influencing current philanthropic practice. He's also picking up where Andrew Carnegie left off: As the legendary steelman said: "The man who dies rich dies disgraced."
While the guy doesn't own a house, his foundation has modest apartments it rents for him in cities (including SF) Chuck likes to visit. Feeney has a great saying which I love to quote: "A man can only wear one pair of shoes at a time." I like the fact that after he set aside enough money to provide financial security for himself and his family, he decided to devote the rest of his life to helping others. His foundation has pledged to give away its assets over the next decade: which according to the estimates above translates to $3.5B. Feeney is a great role model for those who have enough disposable income to buy a much larger (or even a second) home. A simpler life devoted to service is ultimately more meaningful than a life spent in luxury. Owners of large homes should ask themselves, how many empty rooms does one really need? To borrow from Feeney: "A man can only be in one room at a time."

I wonder about the entrepreneurs in the Bay Area, who start company after company, while amassing millions in the process. While its great they create jobs along the way, wouldn't it be amazing to have them eschew the for-profit rat race, and dedicate their time and energy to helping the less fortunate? Role models like Feeney may be what inspire some of these younger millionaires to choose service-oriented paths. While I admire Bill Gates and other high-tech philanthropists, I do think their life of luxury sends the wrong message to the next-generation entrepreneurs.

Feeney's foundation, has collected recent articles about its founder. Read on, and be inspired.

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